India and the United States have concluded a long-awaited trade agreement following a phone conversation between Prime Minister Narendra Modi and US President Donald Trump. The deal ends nearly a year of strained negotiations that had seen bilateral ties deteriorate and Indian exports subjected to some of the highest US tariffs globally.
Under the agreement, Indian goods exported to the United States will now face a reduced tariff of 18%, down from 25%. The additional 25% penal tariff imposed by Washington on India over its procurement of Russian crude oil has also been completely removed, according to multiple reports quoting US ambassador to India Sergio Gor.
India-US Trade Deal: PM Modi Announces Tariff Relief, Hails Partnership
Prime Minister Modi confirmed the tariff reduction late Monday night through a post on X, following the call with President Trump.
“Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement,” Modi said.
The Prime Minister added, “When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation.”
While Modi did not explicitly reference a trade deal in his post, Union Minister Ashwini Vaishnaw later confirmed that India and the US had reached an agreement, describing it as a “win win” for both countries.
Donald Trump Confirms Trade Deal, Zero Tariffs from India
Earlier, President Trump detailed the agreement in a lengthy post on Truth Social, describing the conversation with Modi as an “honour” and calling the Indian leader one of his “greatest friends.”
“He is one of my greatest friends and a Powerful and Respected Leader of his Country. We spoke about many things, including Trade, and ending the War with Russia and Ukraine,” Trump wrote.
The US President said India had agreed to reduce both tariffs and non-tariff barriers on American goods to zero, while committing to large-scale purchases from the United States.
“Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%. They will likewise move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO,” Trump said.
Trump further stated that India would significantly increase imports from the US, “The Prime Minister also committed to ‘BUY AMERICAN,’ at a much higher level, in addition to over $500 BILLION DOLLARS of US Energy, Technology, Agricultural, Coal, and many other products.”
The new 18% tariff rate places India below Pakistan, which currently faces a 19% tariff.
Will Penalties and Tariffs on Russian Oil Purchases Go?
A key component of the agreement appears to be linked to India’s crude oil imports from Russia. Trump claimed that India had agreed to stop buying Russian oil and instead source energy from the United States and potentially Venezuela, arguing that the move would help end the war in Ukraine.
“India had agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela,” Trump said, adding that the move would “help end the war in Ukraine”.
Subsequently, Bloomberg report said the US had agreed to withdraw the 25% penal tariff imposed on Indian imports over its procurement of Russian crude.
Reuters also reported a White House official confirming that the punitive tariff would be removed, though formal confirmation is still awaited.
A White House official told ANI on Monday (local time) that the United States would remove the additional 25% tariff imposed on Indian imports due to Russian oil purchases. However, the official stressed that the agreement requires India to completely halt, not merely scale back, such imports.
Zubair Amin is a Senior Journalist at NewsX with over seven years of experience in reporting and editorial work. He has written for leading national and international publications, including Foreign Policy Magazine, Al Jazeera, The Economic Times, The Indian Express, The Wire, Article 14, Mongabay, News9, among others. His primary focus is on international affairs, with a strong interest in US politics and policy. He also writes on West Asia, Indian polity, and constitutional issues. Zubair tweets at zubaiyr.amin
